How Big Banks Created America’s Credit Card Addiction

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Credit cards in the modern day have become a game where casual consumers obsess over earnings points, spend hours researching their next card, and fixate on getting the best rewards possible. In the past decade, publications and influencers have emerged, promising to help people navigate this ever-growing complexity of products and perks – and banks have paid them millions to keep up this frenzy on top of the usual TV, direct-mail, and online ads.

All this gamification exists for a reason – credit cards are a highly profitable business. Getting people to project their vacations, lifestyle, and social status onto these tiny pieces of plastic and metal is all part of the plan. If people care so much that they’ll even spend their free time thinking about their next card, the money will keep flowing.

Even though the industry has been around since the 1950s, power has rested in the same hands. On the network side, it’s a duopoly with Visa and Mastercard. There is more variety when we look at the companies that actually issue credit cards but the lion’s share of profits still go to the same Big 4 American banks. No one has been able to break this power structure. Even fintech startups like Klarna, Stripe, Brex, Square / Block, Paypal, Affirm, Venmo, and Wise for all their talk of disruption, have not been able to crack this dynamic as even their cards still go through Visa and Mastercard.

Despite the political pressure and intense regulation, it’s these same tight-knit circle of market makers – each happy to keep the other in business. In this episode, we’re diving into the business conspiracy and gamed economics of credit cards through the biggest players in Visa, MasterCard, American Express, Discover, Chase, Citibank, Wells Fargo, and Bank of America.

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